Question $9$

$2\mathrm{.}5$ pts

Bikes$-$R$-$Us is implementing a cost leadership business level strategy. Its VP of Marketing recommends a $$1\mathrm{.}2$ million investment in three R&D projects to create innovative features for new bike brands, but the VP of Finance fiercely opposes the R&D investment.

Which statement below offers the best opportunity for Bike$-$R$-$Us to maintain strong demand for its bikes while continuing its cost leadership business level strategy?

Reduce the R&D project budget to $$950,000$ by selecting two innovative bike features most likely to satisfy its customer's needs and wants while maintaining the industry's lowest average price.

Increase the R&D project budget to $$2\mathrm{.}4$ million by investing in three R&D projects with the goal of establishing itself as the industry leader in new bike brand innovation.

Choose to cancel all R&D projects because a successful cost leadership business$-$level strategy maintains the industry's lowest average price without consideration of a bike's benefits for customers.